Doing Taxes Yourself Doesn’t Have To Be a Nightmare

Gather your documents

The very first step to filing taxes is to get organized. You’ll need to reference a variety of different documents during this process, so it’s best to have them all set up and ready to go before you get started. The most important of these forms include:

W-2 form – used to report wage and salary information, as well as taxes that have been withheld from your paychecks.

1099 form– reports any income outside of your salary. This can include freelance or contract work, interest, dividends, etc. There are different categories of 1099 forms that you can read more about here.

1095 form – for those without health insurance, helps determine whether or not you need to comply with the shared responsibility payment under the Affordable Care Act. If you do have health insurance, this determines whether you’re eligible for a tax return or if you need to make a payment.

Beyond these, you’ll want to think about anything you did this year that might allow you to file for additional deductions. Some of these things include buying a house, getting married, providing childcare, or making charitable donations. For each of these, make sure you have the correct documentation of the event, expenditure, or donation (receipts, medical bills, etc). To read more about the different types of tax forms, check out this resource from Intuit.

Decide on your method

When you’re ready to get this show on the road, there are three filing options for you to choose from: filing via mail, filing online, or filing through a tax professional. Given that it’s 2017, you’ll likely end up going with one of the second two options. If you do choose the snail mail route, check here for the tax forms you’ll need to fill out as well as the address you’ll need in order to file.

There are a few different ways to file online, one of which includes IRS Free File. Depending on your income, you’ll either be able to use this software for free (income under $64,000), or use a ‘light’ version of it (income over $64,000) where you’ll have to do some of the extra work – mostly math – yourself. There is also another government assistance option called VITA, the Volunteer Income Tax Association, which is available for those who qualify.

Perhaps the most efficient way to file online is through a tax filing software. Some examples of this include TurboTax, TaxAct, H&R Block, and Credit Karma. Similar to IRS Free File, these programs offer different tiers of service based upon your adjusted gross income. The major benefit to paying for a service like this is that it will take you through the entirety of the process one step at a time, giving you very specific instructions along the way. For a first timer, the cost proves to be worth the guidance. I’ve personally filed with Turbo Tax in the past, and can vouch for the fact that, as long as you have all of your documents ready, you barely even need to think in order to get that tax return into your hands.

Of course, the option to hire a tax professional remains. One of the biggest reasons to go with a professional is to ensure that you are getting the absolute maximum amount of deductions possible, including those that you might have missed. There’s also the element of quality; if you run a small business, for example, you wouldn’t want anything to fall out of place during the process. That said, this can get pricey, especially for those of us filing our own taxes for the first time.

Read closely and document

The final element of filing your taxes involves keeping updated records of the taxes you pay. Typically, when you use a tax software, you’ll receive PDF files or even a CD containing all of your filled-out documents and all information you might need should you have to reference this tax filing in the future. Some instances where this will come in handy include taking out a loan for a house, or filing taxes in the future.

Remember, it’s okay to make a mistake or two, and in fact it’s quite common. Sometimes, you might even make a mistake and be corrected and given an even bigger return! Take it slow, read carefully, and keep track of everything you file, and you’ll be nailing this adult thing in no time.